Difficult times are ahead for Nokia. The company which is considered as one of the first companies to bring mobile phones is now in the midst of tough smartphone battle. It’s now lagging behind Samsung in mobile phone market-share and future looks very uncertain. In a classic story of Rise and fall of a giant, let’s see whether it can rise again-
Nokia was originally founded in 1865 as a paper manufacturing company in Finland, which then moved to manufacturing rubbers and then also ventured into electronics and cable industry. It entered to telecom industry as equipment manufacturer in 1970s.
1981 saw the launch of Nordic Mobile Telephone (NMT) service, and Nokia sensing the opportunity started manufacturing phones and launched its first car phone- Mobira Senator. In 1987, Nokia introduced the handheld mobile phone for NMT networks- MobiraCityman, which despite its huge price of roughly 4560 euros and heavy weight at 800 g, tasted enormous success. Since then, Nokia became a formidable manufacturer of mobile phones and consecutively became a leader in mobile phones by 1999. It enjoyed this position till 2012, and then it lost it to Samsung. Some of the most popular phones by Nokia during this period were Nokia 1100, Nokia 3310, Nokia 6600, and more.
As they say, “one has to run to stand still”. Starting 2007, when other companies were jumping the bandwagon of touchscreen smartphones and mobile Operating Systems, Nokia kept manufacturing feature phones and smartphones with Symbian OS. Till 2007, Symbian OS was a little bit advanced of its age, which gave Nokia an edge over its competitors, but the introduction of superior OSes like Android and iOS changed the game. The impact can be easily from the share price of Nokia which fell to meager $3 in 2012 from $40 in 2007.
In starting, Nokia shrugged off rivals’ smartphones and advanced OS, but when it started to feel the pinch, it needed to do something. In February 2011, Nokia announced partnership with Microsoft for producing smartphones with ‘Windows Phone’ (earlier Windows Mobile) OS. It was a huge gamble as Nokia in association with Microsoft wanted to establish a third ecosystem to rival Android and iOS. By October 2011, Nokia introduced the new range of phones- Lumia with Windows Phone 7 OS.
Nokia’s success also lied in its feature phones offering basic features at an affordable price. So, It also introduced budget smartphone series with Asha targeting low and mid-range consumers. They ran on Symbian S40 smartphone.
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Q1 2013 results of Nokia suggests that its efforts are finally paying off. While it still can’t be compared to Android or iOS shipments, but still shows increase in sales of Lumia devices. It managed to sell 5.6 million Lumias, which is 27% increase over its sales last quarter. Nokia is trying to cater the whole smartphone market with Lumia offering handsets at low-end (Lumia 520 and 620), mid-range (Lumia 720 and 820) and high-end range (Lumia 920).
In the same period, Asha shipments were 5 million, registering a decline of 46%. This implies that Nokia has to double its efforts for Lumia series as more and more people are turning towards smartphones.
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Hardware wise Nokia phones were always better and still are at par if not better against rivals, but now when the differentiation is actually created by software, Windows phone still lags far behind pretty mature Android and iOS platforms. Compared to more than 700,000 apps present in Google Play Store and App store in Android and iOS respectively, Windows Phone only has 100,000 apps with popular apps like Instagram still not available for it. Also, Windows Phone follows different route of Live Tiles option than Android offering multitude of customization options and iOS’s simplicity and smoothness. It might or might not struck chord with customers. More than Nokia, it seems that Microsoft has to work hard for making its OS more competitive.
Still, we shouldn’t rub Nokia off. The company is showing small but encouraging signs. Nokia is estimating Lumia sales of 7.1 million for Q2 2013, another rise of 27%. It might take time for Nokia to get its crown back, but it’s not impossible. It’s certainly difficult because WP8 is still nascent than its competitors. But, paired with powerful hardware, Nokia’s intuitive software like Nokia Here, Nokia Drive, etc., Lumia series can gain more strong hold in the market.